Amgen closing Longmont, Boulder facilities that employ 430

Local loss of jobs will contribute to overall reduction of as many as 2,900 by end of 2015, most of those in U.S.

Tony Kindelspire

Longmont Times-Call

Posted:
07/29/2014 03:35:57 PM MDT

Updated:
07/29/2014 09:12:16 PM MDT

Amgen in Longmont is seen in this 2012 file photo. (Times-Call file)

Biotechnology firm Amgen announced Tuesday that it plans to close its facilities in Colorado and Washington by the end of next year, resulting in the loss of approximately 430 jobs in Boulder County.

The cuts will begin at the company's facilities in Longmont and Boulder in the third quarter of this year and the sites will be completely shut down by the end of 2015, the company said.

The Thousand Oaks, Calif.-based company said that overall, it is cutting 2,400 to 2,900 jobs, or about 12 percent to 15 percent of its global work force. Most of those cuts will be in the U.S., it said.

Robert A. Bradway

"To minimize the impact on staff, we are offering a voluntary transition program for eligible staff in the U.S. and Puerto Rico," Amgen's chairman and CEO Robert Bradway wrote in a memo to employees that was made available to the media. The memo went out Tuesday morning, in advance of the company's second quarter earnings announcement in the afternoon.

"The voluntary transition program provides an enhanced benefits package to those staff members who may be ready to move on to another career or to pursue other interests," the memo said, adding that details of the voluntary program will be provided to employees in a separate memo.

All of the employees being let go, the memo said, will be offered transition support and severance benefits.

Amgen said in its earnings announcement that the job cuts and restructuring were necessary to "accelerate our long-term strategy for growth and to strengthen our position as a leading global biotechnology company" by freeing up cash to invest in its up-and-coming medicines.

The closing of Amgen's Colorado sites is the second blow to local employees this year. In August 2012, Amgen said it would be ceasing its manufacturing of Epogen, which was only made at the company's Longmont facility. What that meant to local jobs became clear in January, when the company told 200 workers involved in its manufacturing operations that they would lose their jobs on April 30.

At the time, a spokeswoman told the Times-Call that about 430 workers would still be employed at the Longmont and Boulder sites.

Amgen's Longmont site is about 700,000 square feet of building space, with 220,000 of that formerly devoted to Epogen production. The company's Lake Centre facility in Boulder is about 300,000 square feet.

Amgen was formed in California in 1980 as Applied Molecular Genetics. A year later its founders collaborated with scientists at the University of Colorado and opened up a small Boulder office. Its first patent was for Epogen, a compound made to stimulate production of red blood cells.

In 1994 the company bought 650-employee Synergen Inc. in Boulder for $239 million, establishing its Lake Centre facility, which was later expanded. That same year it bought land in Longmont, and in 1999, its Longmont facility was dedicated. In 2003, the Longmont City Council approved Amgen's plans to add up to 5 million square feet and up to 3,000 employees over the next three decades.

Amgen also contributed to the development of the region's biotechnology community. When Amgen shuttered a research and development unit in Boulder, about 20 of its former scientists went on to found Boulder-based Array BioPharma, which also has a Longmont presence.

Officials in Longmont and Boulder announced their disappointment upon hearing Tuesday's news.

"We are committed to helping Amgen employees access employment resources," Longmont Mayor Dennis Coombs said in a joint statement released by the city and the Longmont Area Economic Council. "They are valuable members of the Longmont community, and we will do everything we can to help them land on their feet."

"We are very disappointed to hear that Amgen will be closing the Longmont facility, and the rest of its facilities in Colorado," LAEC interim president Wendi Nafziger said. "Longmont will be significantly impacted by this decision. We stand prepared to work with Amgen, their employees, and other appropriate parties as the transition is made."

Liz Hanson, the city of Boulder's economic vitality coordinator, said she and Boulder Economic Council officials have been in contact with local Amgen executives during the past few months to get updates on what the future holds for the local sites.

"Obviously, we're very interested to learn more, but it's never good news when you are having a major change in an employer like Amgen that has been a key part of the Boulder economy for a long time," she said.

Amgen also was a significant philanthropic contributor to the region, Hanson added.

"We haven't evaluated the full impact yet on our economy; we'll be looking to understand that," she said. "That includes Amgen's role in the Boulder community as well as the use of the site as well as the impact to employees.

"Any time there's a major change, obviously, the more you could understand the broad impacts, the better."

Coombs echoed Hanson's remarks, referring to Amgen as a "respected and cherished" member of the business community that has provided "profound" contributions to Longmont.

"The City of Longmont will work in partnership with Amgen and the LAEC to find potential future uses for the facility," Coombs wrote.

In his memo to employees, Bradway singled out the company's employees in Colorado and Washington.

"The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit," he wrote. "At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities."

The company Tuesday also announced that it is making staff cuts and consolidating buildings in Thousand Oaks and that it plans to expand its presence in the San Francisco Bay area and in Cambridge, Massachusetts.

Investors responded positively to Tuesday's announcement. Amgen's stock (Nasdaq: AMGN) was up 66 cents to close regular trading at $123.31 per share.

The company Tuesday reported second quarter revenue of $5.2 billion, an 11 percent increase over the second quarter of 2013. Its net income in the recent quarter was $1.5 billion, or $2.01 per diluted share, an increase of $1.65 per share in the same quarter a year ago.

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